Likelihood of Happening: ModerateEase of Prevention: HighIs Time a Factor? Yes

Credit cards are incredibly useful tools that allow us to make large purchases without carrying around briefcases full of cash. They also provide a simple way to keep track of spending habits and many provide customers with incentive bonuses every time they’re used. However, credit cards also make it easy for individuals to fall quickly into considerable debt.

Do the Math

Many people with serious credit card debt purposely avoid evaluating the extent of the problem because it makes them upset to think about it. If you want to get yourself out of debt, you will need to attack the problem head on and stop avoiding it.

Start by going through your credit card and bank statements and take note of all the areas you are spending money. To keep things simple, lump each purchase into one of two categories: essential or nonessential.

Things like gas, groceries, and medical costs should be considered essential, while restaurants, movies, and gifts would fall into the nonessential category. Once you know where your money is going, weigh it against the money you have coming in, and figure out where you can make cuts. You don’t necessarily need to start living exclusively on ramen noodles and hot dogs, but perhaps you can start bringing lunch to work instead of eating out. If you’re already down to a bare-bones existence, consider getting a second job to increase your income.

Negotiate with Your Creditors

Depending on the size of your debt, how much of it you’ve already paid, how long it’s been since you’ve made a payment, and a host of other factors, you may be able to significantly reduce the amount you owe. You can either discuss the matter with the credit card companies directly, or you can turn to any one of a number of private companies that will help you with the negotiations.

If the interest you are currently paying is more of an issue than the amount you owe, consider calling your credit card company to request a rate reduction. While such an adjustment might come with stipulations, and there’s no guarantee that the customer service rep will be able to help you, it certainly never hurts to try.

File for Bankruptcy

In extreme circumstances, your only option may be to file for bankruptcy to eliminate your debt. Before you do so, however, make sure you have thoroughly evaluated all other options and spoken with a bankruptcy lawyer.

Everyone’s situation is unique, and the lawyer will be able to determine what is best for you and can help walk you through the process. Be aware that filing for bankruptcy can negatively affect your credit history for up to ten years from the date of filing. Also, debts like student loans, child support, alimony, and unpaid taxes may not be expunged by filing for bankruptcy.